- Sean Snaith – Director, UCF Instiute for Economic Competitiveness
- Don Unser – Retail President
- Anand Krishnamoorthy – Associate Professor of Marketing
- Jahir Hernandez – Student, Former Old Navy employee
- Tina Hand – Dean’s Assistant
- Jessica Dourney – Assistant Director of Outreach and Engagement
Paul Jarley: Black Friday used to sound like this.
Jahir Hernandez: They come in waves and I remember specifically that the check out line was all the way to the back of the store and you couldn’t get from one side of the store to the other because that line was so massive.
Paul Jarley: And now …
News Anchor: News Center 6 team’s Joshua Short is inside the UP Mall where the doors will be opening in just under an hour from now. Josh how are things going.
News Reporter: Look we were expecting a big crowd. We don’t have the big crowd that we expected. I got up at three o’clock excited to do my first ever black Friday and ain’t nobody here. I am literally upset right now. I don’t know why people did not wake up.
Paul Jarley: Where did all the shoppers go?
Tina Hand: Wasn’t worth it so I haven’t done it probably for the last five years.
Jessica Dourney: I won’t be there cuz I’ll be watching the UCF Knights, our national champs, playing at the, in Tampa.
Paul Jarley: Eh, maybe they’ll shop on Monday.
Paul Jarley: This show is all about separating hype from fundamental change. I’m Paul Jarley, Dean of the College of Business here at UCF. I’ve got lots of questions to get answers, I’m talking to people with interesting insights into the future of business. Have you ever wondered, is this really a thing? On to our show.
Paul Jarley: UCF student Jahir Hernandez recalls his most vivid Black Friday memory. It was from behind the cash register at an Old Navy.
Jahir Hernandez: The pleasure and the privilege of working Black Friday, my hours were from 1:30 a.m. until 12:30 p.m.
Paul Jarley: Jahir didn’t love it.
Jahir Hernandez: My most vivid memories would definitely be that rush I think at around 9:00 a.m. where people kinda get up, they have that turkey hangover where they’re done with that. They come in waves, and I remember specifically that the actual checkout line was all the way to the back of the store and you couldn’t get from one side of the store to the other because that line was so massive. You have people that are super nice that maybe they’ve worked in retail before, they understand the craziness. You also have those other people that are there just to get whatever they want and they’re very upset.
Paul Jarley: Who’s responsible? When did all this holiday shopping madness get its start? Black Friday isn’t as old as you think. It started in Philadelphia back in the 1950s, and got its name from police officers who hated being dragged out the day after Thanksgiving to deal with the local shopping madness. It didn’t become a national phenomenon until the 1980s, and by then it was reinvented to be the day that retailers finally got into the black, well, at least that’s the story. Don Unser is a USF alum and retail group president at NPD. NPD is the nation’s leading retail sales data company. If anyone would know when retail companies turn into the black, it would be them. And well Don, he’s a little skeptical of the story.
Don Unser: The original roots of Black Friday, it was a point in time at which the retailer turned for the year to be profitable, and there are a lot of myth busting things out there that said did that really happen or did that not happen. I guess back when we had a traditional predictable retail season, when we had just stores and we knew what the season was, we knew what the consumer was going to do, it was this kinda static environment, I think there could have been a relative time on the calendar where there was some profitability.
Paul Jarley: But those days are long gone. Here’s professor Anand Krishnamoorthy from our marketing department.
Anand Krishnamoorthy: The data suggests that either retails are already significantly profitable before Black Friday, or if they’re not profitable by Black Friday they are not turning a profit after Black Friday.
Paul Jarley: Don sums up the evolution of Black Friday story this way.
Don Unser: It’s just a milestone that they use to create a buying holiday for the consumer.
Paul Jarley: But who the heck needs a buying holiday? Anand says, “department stores, for one.”
Anand Krishnamoorthy: Department stores are traditionally the ones that banked on Black Friday turning things around for them. Traditionally stores that don’t rely a lot on sales promotions tend not to be affected by Black Friday a whole lot. Target and Walmart for example, they’re not into sales promotions, they’re low priced stores right traditionally speaking. So, like if you’re a Ross or a Burlington operations, you’re traditionally not affected by Black Friday. If you’re an upscale retailer, you’re not affected by Black Friday because you don’t discount a whole lot. It is stores in the middle, traditionally have been department stores.
Paul Jarley: And online merchants, well, they like to create fake shopping holidays too.
Sean Snaith: You know the made up holiday of Single’s Day and Prime Day I think are studies in and of themselves.
Paul Jarley: Hallmark might be able to tell us a lot about that, but what do you think?
Sean Snaith: Exactly. Neither one of those days mean anything. Matter of fact on Prime Day most people don’t even remember the origin of it, but what Prime Day was is Amazon saw that Jet was about to launch their platform and so they did a Prime Day to put out great deals that would squelch the launch of Jet.com. And that was Prime day. So, the origin of these two days are interesting. The fact that Single’s Day did as much volume as it did and does is absolutely fascinating.
Paul Jarley: Oh, it’s more than fascinating. Listen to Anand.
Anand Krishnamoorthy: How much did Alibaba bring in on Single’s Day four days ago, do you know?
Paul Jarley: I can’t imagine. It’s gotta be a humongous number-
Anand Krishnamoorthy: [crosstalk 00:05:44] an excess of 30 billion dollars alright, in one day. Amazon’s Prime Day brought in four billion dollars or so.
Paul Jarley: And then there’s that fake online holiday phenomena.
Anand Krishnamoorthy: Cyber Monday is the most attractive online shopping day of the year. Brings in I think about six seven billion dollars or so.
Paul Jarley: But like Black Friday, online holiday shopping is a bit over hyped.
Anand Krishnamoorthy: What percentage of holiday sales do you think takes place online. As of last year, what was that percentage?
Paul Jarley: I would guess forty percent.
Anand Krishnamoorthy: It was a hundred billion dollars in change. It was less than twenty percent of all of holiday sales alright. 700 billion sales of holiday shopping take place. Only a hundred billion comes from online.
Paul Jarley: Anand’s data tells me, you’re going holiday shopping. If you can’t help yourself and feel the need to battle the crowds in search of that bargain, here’s some things to keep in mind. First, our resident economist Sean Snaith tells us, “It’s going to be a big holiday season. People have money in their pocket, they’re feeling good, and they’re ready to spend.”
Sean Snaith: One of the strongest in quite a few years. Take home pay is a little bit larger, and that’s also converging with faster growth in wages and salaries as the labor market tightens. And consumer confidence is at eighteen year highs, people are feeling pretty good. The labor market’s good, the economy is doing well, and those are conditions that are conditions that are conducive to spending.
Paul Jarley: And Don says, “Retailers are ready.”
Don Unser: I think the retailers are set with inventory.
Paul Jarley: Especially with this year’s hot ticket item.
Don Unser: We think that the Smart Speaker, the Echo products, and the Google Home products will continue to be very hot this holiday. We think stereo headphones are gonna be very hot, really led by Apple Air pods. Those are just absolutely on fire right now, and for the last year, year and a half those have been in heavy allocation. Retailers haven’t been able to get enough and now they are. We also think that anything having to do with the home categories are gonna be really strong. The Instant Pot, last year, which was a super hot product, and the air fryers. These are two convenience splays basically for the consumer. Both of those will continue to be very hot this year.
Paul Jarley: But what about the kids?
Don Unser: To tell you some of the hottest toy products, Lol Surprise will still be hot this year
Anand Krishnamoorthy: I think [inaudible 00:08:17] which is a soft plush doll that comes in a hard package so you’ll have to soak it, rinse, then you’ll dry, but then it becomes a plush doll after you do all of that. There’s another, I think it’s called Hatchibabies, so now instead of Hatchimals it’s now Hatchibabies where you can actually get a boy or a girl from an egg so they’ve taken parenting to the kid’s level with them.
Paul Jarley: But there’s not much need to go out early.
Anand Krishnamoorthy: Traditionally shopping on Black Friday has never been about peoples showing up at three in the morning and waiting in lines. The peak shopping season-
Paul Jarley: That’s fake news. Is that what you’re telling me?
Anand Krishnamoorthy: Not much of the sales comes from there. Much of Black Friday sales actually happens in the early to mid afternoon. So, peak Black Friday shopping time in terms of foot traffic is between two and four in the afternoon on Black Friday. It is not the mornings.
Paul Jarley: And it could be dangerous.
Anand Krishnamoorthy: The numbers tell you that you’re more likely to get killed shopping for a door buster on Black Friday than from a shark bite. Alright, more people die in stampedes on Black Friday.
Paul Jarley: You can reduce the likelihood of getting injured, and increase the likelihood of landing that toy by having the family spread out, and using their cell phones.
Anand Krishnamoorthy: Today, holiday shopping on Black Friday is more engaging because you can now have different people in the family go to different stores, communicate on the phone, and extend information that expands the shopping options for the family and friends.
Paul Jarley: So browse at the stores, and if you don’t find what you’re looking for, well then, shop online.
Anand Krishnamoorthy: Friday online brought in about five or six billion dollars last year. So, when we talk about Black Friday, the old definition of people walking into the stores may not be doing its thing, but people are still shopping in droves online on Black Friday. Traffic on Black Friday doesn’t appear to be significantly off either.
Paul Jarley: So they’re browsing and then going home and buying it online?
Anand Krishnamoorthy: There’s a lot of store roaming going on. They find out what’s going on and then they go to a lower price to a location online, don’t have to leave the house-
Paul Jarley: Or if that’s not social enough for you. Consider this.
Don Unser: People getting together and going to the coffee shop and doing their eCommerce shopping together. We see some of that.
Paul Jarley: I sense a fake Starbucks Holiday on the horizon. It’s time to call the question, is Black Friday still really a thing? From Jahir Hernandez.
Jahir Hernandez: I think it definitely still is a thing. I think people nowadays are always lookin’ for like one deal. Maybe there’s something that you really want that’s in Best Buy at may three in the morning that you’re willing to get, so I think it’s still a thing.
Paul Jarley: From Sean Snaith.
Sean Snaith: No.
Paul Jarley: Why not.
Sean Snaith: Yes.
Paul Jarley: We’ll get back to you Sean. From Anand Krishnamoorthy.
Anand Krishnamoorthy: Yes, and no. Black Friday is not what it used to be in terms of retailers becoming profitable. Black Friday’s meaning has changed. It is not retailers turning a profit that day. It is not about bringing people into the stores at three in the morning. It is also moved online.
Paul Jarley: Okay Sean, try again.
Sean Snaith: I’ll say yes it’s still a thing because it’s symbolically still important if not important because of where it falls on the calendar as much.
Paul Jarley: From Don Unser.
Don Unser: Black Friday is not really a thing. Does it matter. It is a point in time in the retail selling season that is a bit of a milestone, if you will, but one of the proof points that Black Friday is not a thing is just look at the advertising that’s done. It really starts in early November, late October. That’s your first proof point that Black Friday really isn’t the start of the holiday season. It is now the beginning of November and the end of October.
Paul Jarley: It’s my podcast so I get to go last. I had one last important question for each of my guests. Are you going Black Friday Shopping?
Jahir Hernandez: Personally, I procrastinate as much as possible and online.
Sean Snaith: I for two won’t be going Black Friday shopping. Maybe cyber Monday if I remember.
Don Unser: I am going Black Friday shopping. Personally, because it’s my job. I have to be at the malls and I’m live tweeting.
Anand Krishnamoorthy: Online yes. In store, probably in the afternoon.
Paul Jarley: Just to make sure I didn’t miss the target audience for Black Friday, I sought out a few expert shoppers. First from Jess Greene Dourney.
Jessica Dourney: No, I won’t be there cuz I’ll be watching the UCF Knights our national champs playing in Tampa.
Paul Jarley: From my executive assistant Tina Hand.
Tina Hand: I’ve done it before. I’ve gotten up at five o’clock in the morning before with my girlfriends, I went Black Friday shopping, wasn’t worth it. By twelve o’clock I’m back home. So I haven’t done it probably for the last five years.
Paul Jarley: Notice, there’s not a sense of urgency in any of their voices. When shopping was local, scarcity was a real concern, and retailers could play on this. If you couldn’t find that coveted holiday gift within a reasonable drive of your home, you risked disappointing a loved one, and that drove you to get up early and get it done. Today, shopping is global, and with free two day delivery and stiff competition for the consumer dollar, people have plenty of options other than getting up at three in the morning to get that gift before the appointed time.
Paul Jarley: Tina Hand nailed it. Sorry Black Friday, you’re just not worth it anymore. What do you think? Check us out online and share your thoughts at business.ucf.edu/podcast. You can also find extended interviews with our guests and notes from the show. Special thanks to my producer Josh Miranda and the whole team at the office of outreach and engagement here at the UCF College of Business. And thank you for listening! Until next time, charge on.